What do my Fees Actually GET ME?

WHAT DO MY FEES GET ME?

I often hear from people who live in an HOA, our HOA fees are a RIP OFF, we do not get anything for what we are paying for. Well actually you do. I am going to go over a basic HOA budget and show you what you are actually paying for.  This is not the same for EVERY HOA but this is a good example of what you are getting and paying for.

What is it?    How Much
   
Management    $9.45
Bank Charges Licensing Property Taxes    $0.22
Postage/Printing/Coupon Books    $1.30
Landscaping Snow and Plowing and Sprinklers    $25.49
High Speed Internet and TV    $51.47
Insurance (Master Policy)    $16.11
Misc. Common Area Repairs & Maintenance    $2.92
GARBAGE PICK UP    $10.50
Irrigation Water - Electric Utilities    $6.16
Lights Fences Surveillance    $2.52
Legal Fees and Accounting    $2.45
CAPITAL RESERVE CONTRIBUTIONS   
Asphalt Streets    $6.08
Concrete HOA Sidewalks    $2.80
Fence Monuments Signs Maintenance    $1.82
Concrete Curbs    $2.52
Landscaping Common Trees    $2.80
Lawn Sprinklers    $0.39
TOTAL FEE    $145.00

Now as you can see that is quite a lot of items, for the fee.  Let’s explain what each item is line by line. 

Management, what do they do. Well the Property Manager fields all the calls, manages all the costs, gets all the vendors in and out to do the work required to maintain the property. They also do the accounting and collecting of the HOA dues. They also get all the paperwork for all the people who are moving in and out, and get everything ready for the Board Members monthly meetings. The Property Manager is also there to make sure things are done in accordance to the law and the CC&R's. 

Bank Charges Licensing Property Taxes. Your HOA has to be certified with the state as an active NON PROFIT Organization. And the Property Taxes for the common area's have to be paid by everyone who lives there.

Postage/Printing/Coupon Books This is for all the notices, letters, communication and yearly coupon book that you need to use to pay your HOA dues. 

Landscaping Snow Removal/ Plowing and Sprinklers systems. Well this does not come free, this is usually contracted out and managed and maintained by a landscaping company.  There are a lot of different companies out there. If you do not care for, or appreciate the job that is being done with your current provider, let your HOA Board know your concerns. They will review the contracts and do what they can to address the issues. 

High Speed Internet and TV This is the largest cost of this particular HOA, but they have Fiber Optic Internet Speeds basic 15 up and down, and Basic Cable over 200 channels and HD. Now you contact your local provider and see if they can get you a Rate for the same for under $52.00 with out a Bundle or a Contract. 

Insurance (Master Policy) This covers the entire structure of the house. The best way to explain this is to take the roof off the house and turn it upside-down and shake. Anything that FALLS out of the house is your responsibility as an owner to cover with your insurance. The Master Policy Covers everything else. 

Misc. Common Area Repairs & Maintenance: This covers the light bulbs, and lighting for safety, the painting of the parking-lot, the doggie station baggies and trash removal of puppy poopie. 

GARBAGE PICK UP: Instead of once a week in a subdivision and paying on average $200 a year, you get your garbage picked up three times a week and for a lot less. 

Irrigation Water - Electric Utilities to water the grass and keep the lights on at night. 

Lights Fences Surveillance  This pays for the security system and the power to run them, to maintain the cameras on the property. 

Legal Fees and Accounting: This is to pay for the collection of past due fees, sometimes people fall on hard times, or get into the mindset that they do not have to pay their HOA dues. Well these legal fees put liens on the properties that are delinquent, pay for the collection efforts and help the HOA not fall into financial failure due to this situation. 

(This does happen, people feel the Internet and TV services do not meet their needs so they get their own through another provider. Then because they are not using what part of that HOA fee covers they feel that they do not need to pay any of it. I am sorry to say, Nope Sorry, you cannot do that. You have to pay the HOA fee in full every month regardless of your choices because again you agreed to it when you signed the papers at the title company when you settled and closed on your purchase of your home in the HOA.)

CAPITAL RESERVE CONTRIBUTIONS    (Capital Reserve is required per STATE LAW) the HOA has to have funds in reserve to cover catastrophic events and repairs. If the HOA you are considering moving into does not BUDGET or have a Capital Reserve fund, find out why, and I advise my home buyers to stay away from that because that means future SPECIAL ASSESSMENTS. I will go into that in a later post)

Asphalt Streets   Private subdivision, is responsible for their own streets maintenance and repair. It is better to have this on budget because it is a reoccurring expense. 

Concrete HOA Sidewalks Utah Winters are BRUTAL and on sidewalks when people put SALT on the concrete well it eats away at the ground and it turns into Ugly Sidewalk. You have to maintain that and keep up on that. Ask your HOA Landscaping company to use Ice Melt with out SALT to preserve the sidewalks and keep the sidewalks lasting longer. 

Fence Monuments Signs Maintenance, traffic signs for the streets and the fencing outside and around the property. Yes it is sad truth but people back into fences and bust through them, vandals graffiti the fences. This is just the part of being a property owner, and being part of the HOA you all get to help pay for that to keep it looking good. 

Concrete Curbs keeping the paint on the curbing and the repairs done when they get crashed into. 

Landscaping Common Trees. Trees Die, they get crashed into, they get broken by kids playing on them. You have to trim them, and spray for bugs. This is what this category is for. 

Lawn Sprinklers  They BREAK all the time, people run over them with their bikes, the lawn mower hit's it just right. Just regular maintenance. 

So as you can see you DO get a lot for what you are paying for. And if your HOA budgets properly you will not have to deal with Special Assessments.

When your HOA does not budget or plan properly, then if something happens that needs repair then every owner would be given a Special Assessment to cover the costs and you would have to come up with that money in some cases less than a month and I do not know about you but I would not like the burden of coming up with $1000 or more in one month for someone's failure to plan ahead. 

In the next blog post, we will discuss how most HOA BOARD Meetings work, and what the Annual Meeting is supposed to be about. 

Thank you for reading and if you have any questions, feel free to ask. 

Emily Jones, Keller William Real Estate Agent.